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DCV Holdings3/24/2005
Submitted: August 5, 2004
Decision Following Bench Trial.
Judgment For Defendants.
BACKGROUND
Defendants Du Pont and ConAgra set up a series of limited partnerships under a corporate general partner, DCV, Inc., which was jointly owned by Defendants. DCV, Inc. oversaw 13 Du Pont/ConAgra joint ventures, which were structured as independent operating companies (IOC's), each with its own management and accounting structure. The companies were involved in the animal nutrition and food ingredients businesses, and appeared to have growth potential in bio-nutrition and certain environmental markets. DCV, Inc. employed more than 500 people in nine different states, as well as Mexico, Canada and Malaysia.
Each IOC reported on a monthly basis to DCV, Inc's officers, who compiled the results into an omnibus monthly report. In turn, the officers reported the results to the DCV, Inc. board of directors. The board's role was to assess and approve the IOC's annual business plans and monitor their progress.
By October 1996, most of the businesses were under performing, and Defendants decided to sell the businesses and dissolve DCV, Inc. Instead, four of the DCV, Inc. managers sought to purchase the company, in conjunction with Winward Capital Partners, L.P., a private equity and subordinated debt organization.
After lengthy negotiations, the deal was closed in August 1997. The venture was incorporated under the name DCV Holdings, Inc., which is Plaintiff in this case.
Things did not go well for the new company, as business continued to decline for most of the IOC's. Worse yet, top executives in DuCoa, one of the most profitable IOC's, were involved in an international antitrust conspiracy regarding price fixing of choline chloride, DuCoa's primary product. Following a federal investigation, three DuCoa executives entered guilty pleas to various charges. As a result, prices for choline chloride took a nose dive, as did DuCoa's profit margin. Plaintiff sold most of its businesses to pay off debts, including the acquisition debt. More than 100 civil suits have resulted from the choline chloride antitrust conspiracy, but the record does not reflect that Plaintiff has any accrued liability as a result of these suits. None of these actions names DCV Holdings as a defendant, but many of them name DuCoa, Du Pont and/or ConAgra.
In March 1998, Plaintiff DCV Holdings filed this action in Superior Court against Du Pont and Conagra on a variety of legal theories, seeking recission of the Purchase Agreement as well as punitive damages of $100,000 million, or, in the alternative, indemnification for its losses. Defendant Du Pont filed a third party complaint against five individuals, seeking indemnification or contribution.
In April 2002, this Court granted and denied a number of partial summary judgment motions filed by both parties. After unsuccessfully seeking an interlocutory appeal on its principal claims, which had been dismissed, DCV Holdings moved for a voluntary dismissal all claims save two. That motion was granted, and Plaintiff appealed this Court's decision granting summary judgment to Defendants on Plaintiff's fraud and breach of contract claims. The Delaware Supreme Court reversed this Court's decision, and returned the case to Superior Court for trial, based on a finding that the record disclosed issues of material fact.
Following remand, two issues were to be addressed at trial. The first issue, on which Plaintiff's fraud claim is based, pertained to a letter promising a rebate which DuCoa improperly obtained from Du Pont for its purchases of trimethylamine ("TMA"), a raw materi
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